Focus of the 12th Plan for Environment Control in the I&S industry a) Diffusion of Pollution Control Technologies

7.5.1 While the diffusion of environment control technologies is relatively high in case of new units, the same is not true in case of existing units. The main barrier for diffusion of environment control technology has been the very high capital(up to 6-8% of capital costs) and operational costs( up to 2-3% of operating cost). Though there are fiscal benefits like 100% depreciation for installation of pollution control equipment, the incentives are still not considered adequate by the industry. It is therefore necessary to enhance these benefits to 200% to make it more attractive like in case of investments on R&D.

7.5.2 One of the main reasons for environmental pollution in the vicinity of steel plants is clustering of several steel and steel related ancillary industries in a single area, leading to serious environmental degradation due to limitation on the carrying capacity of the surrounding area. The sitting considerations for large industries based on ―carrying capacity‖ approach need to be adopted to reduce the cost of environment control.

7.5.3 The focus of the 12th FYP for environment control and diffusion of technologies will be on:

 Adoption /retrofication of Best Available technologies for pollution prevention/control to minimize air pollution

 Reduction of process dust emissions to less than 1.0 kg/tcs

 Online monitoring of Stacks in all plants

 Use of low sulphur coal in coke making& desulphurization of coke oven gas, wherever applicable.

 Staged combustion in burners to reduce NOx emissions, wherever applicable.

 Reduction of fresh water usage to less than 4.0 m3/tcs in integrated steel plants and work towards achieving ―Zero‖ water discharge.

 100% usage of BOF & EAF slag by introduction of a product standard.

 Sharing of best practices for recycle of micro fine dust and sludge

 Comprehensive waste audit and attain 100% recycling of wastes to achieve zero wastes generation

 Installation of site specific Pelletisation plants to minimize the environmental pollution and conservation of minerals.

 Remove barriers for investment on environmental control facilities by enhancing the depreciation benefits to 200%

 Environmental Capacity building through specialized training

 Promotion of renewable energy generation (Solar and non solar) towards green economy and sustainability.

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b) Regulatory frame work Environment

7.5.4 The expansion and installation of new steel making capacity beyond 30,000 tons per annum and sponge iron units with capacity beyond 200tpd, requires environmental clearance from Ministry of Environment and Forests. The units with capacities below these threshold capacities require clearance from the respective State Governments and Pollution Control Boards. MoEF has notified environmental standards(norms) for environment quality for individual processes, with the state pollution control boards being made responsible for their implementation.

7.5.5 The Ministry of Environment & Forest (MoEF) had launched in association with the steel industry an innovative scheme, "Corporate Responsibility for Environmental Protection (CREP)" for the steel industry in March 2003. The purpose of CREP was to motivate the industries to aim ―beyond compliance‖ of regulatory norms. The Charter had set time based targets concerning conservation of water, energy, reduction of pollution, waste minimization etc. A Task Force was constituted by central Pollution Control Board(CPCB) for monitoring the progress of implementation of CREP recommendations, which also facilitated as a forum to discuss the environmental performance of different steel making units and to assist the industry in resolving issues faced by them in terms of bench marks, process improvements, gaps in technology, identification of research needs and regulatory issues if any.

7.5.6 The CREP has been effective in bringing the industry and the regulators on a common platform for sharing knowledge and to seek clarifications on several regulatory issues and also playing a major role in implementation of several new technologies for energy and environment in the integrated steel plants.

7.5.7 The CREP introduced in 2003, needs to be revisited by the steel industry and MoEF, considering the current status of technology, its diffusion, technologies, considering the current environmental issues of Climate change and other international legislation applicable for steel industry. The revised CREP should also include DRI and secondary steel producers.

International Legislation

7.5.8 Steel, is a heavily traded commodity with large volumes being imported/exported across countries. Environmental standards and their effective compliance is becoming important as ―environment‖ is increasingly being seen as an important factor in providing a level playing field for steel producers. Further, the financial institutions are now imposing stricter conditions for environment compliance often stricter than the National standards. It is therefore necessary for the Indian steel industry to focus its attention to adopt a proactive

151 role in designing their facilities to meet international legislations like those published by the World Bank.

Energy

7.5.9 Recognizing the importance of energy conservation, Government has enacted the Energy Conservation Act, 2001 and the integrated steel plants have been identified as one of the eleven designated consumers. The Act stipulates regular energy audits, requirements of energy managers, submission of returns, energy labeling etc. The Act has been recently amended by introducing energy consumption norms.

7.5.10 India's climate policies for the industrial units are contained in the National Mission for Enhanced Energy Efficiency (NMEEE) and are aimed principally at improving energy efficiency rather than CO2 reduction. The aim is to reduce the emissions intensity of its GDP by 20-25 percent from 2005 levels by 2020. Under the National Action Plan on Climate Change (NAPCC), National Mission for Enhanced Energy Efficiency (NMEEE) has planned four new initiatives:

• Perform Achieve and Trade Scheme (PAT), a market based mechanism, involving the trading of energy saving certificates, to enhance cost effectiveness of improvements in energy efficiency in large industries like steel.

• Market Transformation for Energy Efficiency (MTEE) to accelerate the shift to energy efficient appliances including leveraging of international funds for promoting energy efficiency and implementing a National Energy-Efficiency Clean Development Mechanism (CDM).

• Energy Efficiency Financing Platform (EEFP) allows for the creation of mechanisms that would help finance demand side management programmers in all sectors by capturing future energy savings, • Framework for Energy Efficient Economic Development (FEEED) by

creating two fiscal instruments to promote energy efficiency, Partial Risk Guarantee Fund (PRGF) and Venture Capital Fund for Energy Efficiency (VCFEE)

7.5.11 PAT is an energy efficiency certificates trading program. It is an intra country trading program that will apply to facilities in nine energy-intensive industries, including iron and steel. PAT will commence from April 2011 and apply to nearly 685 designate consumers of which nearly 110 units are in the iron and steel sector with planned reduction target of 4.16% in energy consumption. Under the PAT scheme, the regulatory role is played mainly by the BEE.

Best Available Technology (BAT)

7.5.12 The information on best available technologies for energy efficiency and environment protection is important and has helped the industries of developed countries to improve their efficiencies in a sustained manner. This has also

152 helped in bringing together the regulatory authorities and industries on a common plat form. BAT documents for the steel and other industries areas are regularly being published in other countries. Similar document for the Indian steel industry covering all routes of steel production will be a very important step in ensuring a smoother route to sustainable steel production.

7.5.13 The focus of the 12th FYP for the regulatory frame work will be on

 Preparation of BAT documents for primary and secondary steel sectors

 Revision of CREP in association with MoEF for all sectors of steel making, taking into account the current best available technology; revision to environment standards; research needs; threshold limit of capacities; siting guideline for industries and to act as a forum for sharing knowledge amongst the industry. etc

 100% Use of EAF & BOF slag

 Facilitate industries in utilizing opportunities available under the NMEEE

Low Carbon Economy

7.5.14 Climate change is a major threat faced by the mankind, needing global attention. The Indian steel industry emitted 117 million ton in 2007, with projections of emissions up to 450 million ton by 2020. Any policy intervention by the Government in CO2 reduction will affect the steel industry directly.

7.5.15 It is noted that the overall sectoral CO2 emissions from the steel sector in the country will depend not only on the CO2 intensity of each process routes (BF-BOF, Scrap/DRI-EAF and EIF), but also on their share in steel production. It is therefore important to understand clearly the impacts of process routes on carbon intensity and guide the steel industry in the future towards a low carbon economy

7.5.16 The focus on low carbon economy will remain on the availability of raw materials for steel making. Considering the non availability of large volume of scrap for EAF/EIF steel making and natural gas for DRI making, iron ore will remain the main stay of crude steel production in the country for the foreseeable future. The routes for steel making from iron ore will thus be confined only to two routes viz BF-BOF process and Coal-DRI/EAF-EIF.

7.5.17 Amongst these two routes, the BF-BOF route has lower carbon intensity and needs to be promoted. However it should be noted that low levels of energy and environmental efficiencies can only be achieved at larger capacities, necessitating installation of new facilities with larger capacities.

7.5.18 It is imperative for the Coal based DRI route to steel making upgrade its technology through R&D and technological up gradation to improve its energy efficiency for sustaining its share of production in the Indian steel industry. 7.5.19 While the integrated steel producers are familiar with the issues of climate

change and its impacts, similar understanding among the secondary steel producers is lacking. With Climate change throwing up several opportunities like soft financing from other developed countries; it is necessary that the secondary

153 steel sector is also made aware of such opportunities. The committee feels that a Climate Change wing is created in MOS with representation from primary and secondary steel producers with responsibility for bringing in awareness on climate change and the role of steel industry; Estimation and reporting of emission intensities from individual steel sectors; Develop policy initiatives for facilitating low carbon growth; Identify research needs at international, national and industrial levels.

7.5.20 It is felt that even after implementing energy conservation and efficiency improvements projects mentioned earlier, the anticipated CO2 reduction from the steel sector will still be higher. Thus there is a need to look at other technologies like carbon capture and sequestration(CCS) and new routes to carbon free steel making. Currently, there are several research activities being carried out in this direction and it is necessary that steel industry/Ministry is actively involved in them.

7.5.21 The focus of the 12th FYP for the Low carbon economy will be on

 Set up a Climate Change Committee (CCC) under MOS

 Interact with other industrial sectors like power for research on CCS and its applicability.

 Facilitate either directly or through involvement in research on new routes to steel making and in projects like ULCOS.

 Pursue Climate change initiatives listed under low carbon economy

 Facilitate in development of LCA for various steel products

 Promote environment friendliness of steel products.

 Steel industry to promote a recycling oriented society

 Introduce EMS(ISO-14001) in all sectors of steel making